SUPERMARKETS are planning to sweep up savers' cash by taking on the banks.

While more bank branches close - Northern Rock is the latest to swing the axe, shutting 20 offices - supermarkets are bidding to fill the gap.

And Sainsbury reckons the convenience of dropping off your savings as you shop will mean us all putting away up to #7.9billion extra a year. It estimates that 11 million people would save more if the process was made easier for them.

Sainsbury's Bank has launched a pilot scheme in 20 stores nationwide where customers hand over cash or cheques at the service desk. There will also be deposit boxes.

If the scheme is a success it will be extended to all 535 stores nationwide.

Savings manager Donald Jarvie says: "People are leading busier lives and the financial services industry needs to make it easier to manage their accounts." But his bank is way behind rival Tesco which already lets savers deposit cash and cheques in more than 600 stores.

Many are open 24 hours a day allowing savers to put money away in the middle of the night if they want.

Tesco has offered saving-in-store for more than three years and has taken #714 million over the counter during that time.

Customers use a savings card which the store swipes and they can deposit cash or cheques.

"Clearly the customers love it. It is good for them. The key thing here is convenience. It is particularly good for people who work irregular hours, but it is usually customers in doing their weekly shop who are then depositing cash," says Tesco's Stuart Neill.

That is the case for nursery teacher Marjorie Booth from Dalkeith, Midlothian. The 46-year-old opened a Sainsbury savings account earlier this year and is currently saving around #100 a month with the aim of helping to pay for renovations at her home.

"I shop at Sainsbury anyway and it is handy and competitive with other accounts. I know some banks open on Saturdays but here you can drop money off when your in doing your shopping," she says.

Sainsbury's savings account pays up to 3.05 per cent on its instant access and 3.55 per cent on its direct saver account for people with #10,000 or more.

Tesco pays up to 2.75 per cent on its accounts for anyone putting in #10,000.

But that doesn't make either of them the best deals around - Leeds & Holbeck pays 4.15 per cent if your willing to lock your cash up for 60 days.